Constitution Check: How much secrecy does the First Amendment give to political donors?

Lyle Denniston, the National Constitution Center’s constitutional literacy adviser, looks at an issue likely heading to the Supreme Court: the anonymity-in-politics question.

THE STATEMENT AT ISSUE:

“When they are known, members and donors of the Americans for Prosperity Foundation encounter concerted harassment, often with violent overtones. Two of the Foundation’s co-founders are David Koch, who is also the Foundation’s chairman, and his brother Charles Koch. Over the past five years, David Koch and Charles Koch have faced unrelenting threats and attacks via social media, phone calls, email, and protests outside their homes and places of business, due in part to their work with, or perceived ties to, the Foundation….Grotesque threats have been leveled against known associates of the Foundation…Precisely because they fear compelled disclosure and the harms that will follow, would-be donors are shying away from contributing to the Foundation, and current donors have warned that they will cease their contributions as and if the prospect of disclosure rises. It is to alleviate such chilling effect that the First Amendment and federal statutes protect against the compelled disclosure of an advocacy organization’s donors.”

– Excerpt from a lawsuit filed by the Koch brothers’ foundation on December 9 in a federal trial court in California. The lawsuit seeks to block demands by California officials that the foundation file reports with the state government disclosing its donors, in order to keep its status as a tax-exempt charitable organization.

WE CHECKED THE CONSTITUTON, AND…

Political debate in America has a long history of anonymous expression of views. In fact, much of the debate over ratification of the new Constitution in the late 1780s was carried on under pseudonyms: “Publius” was the only listed author of the Federalist Papers; “Brutus” spoke for some opponents of ratification. Of course, America has long known the real identity of “Publius” (James Madison, Alexander Hamilton and John Jay), but there is still some debate about who “Brutus” actually was.

The Supreme Court has actually been on both sides of the anonymity-in-politics question: it has shielded civil rights organizations from having to disclose their donors, and has provided privacy for issuers of political flyers, but at the same time, it has said that government has clear authority to require public disclosure of the sources of campaign spending.

In fact, in perhaps its most controversial campaign finance decision – the ruling in 2010 in Citizens United v. Federal Election Commission – the court made clear that, in return for allowing corporations and trade unions to spend freely on federal elections, they had to be willing to disclose what they spend.

It is no surprise, then, that the constitutional debate goes on over disclosure of the sources of money in politics. And that debate has only intensified as a consequence of two facts about modern politics: first, the deep polarization of the parties and the effect that that has on coarsening the content of political expression, and, second, the increasingly decisive effect of “outside” money flowing into a state (often anonymously) to influence the outcomes of federal elections.

On one side of this debate are those who worry deeply about what they call “dark money” – campaign spending from groups that rely on anonymous sources, and on the other side are those who worry that hostile reaction to controversial political statements will cause people to censor their own expression.

Some of the more controversial organizations that are active in today’s politics – for example, the Koch brothers’ Americans for Prosperity – are at the center of debate over whether they should continue to operate under the shield of secrecy for their donors. The Internal Revenue Service, which writes rules for groups that seek to qualify as tax-exempt charitable organizations, has been struggling with that issue for several years, and appears to be nowhere near resolving it.

When a would-be charitable organization files for tax-exempt status with IRS, it has to include in its filings the identity of its donors. But the law that governs what IRS does with those applications requires IRS not to publicly disclose donor lists for organizations that are granted an exemption from federal tax.

This year, however, the attorney general of California has been moving energetically to force politically active groups that have tax-exempt status under that state’s laws to disclose to the state government the list of donors that they have filed with the IRS. State officials promise not to publicly disclose those lists, but they would use them to determine if an organization is violating the rules for tax exemption under California law.

A Virginia-based group, the Center for Competitive Politics, was the first such group to start fighting back against the California effort. The Center, an advocacy group that primarily works to protect the First Amendment rights of other advocacy groups in politics, sued the state attorney general in federal court. However, it has failed so far to get disclosure orders blocked by the federal judge handling the case, and that dispute has gone on up to the federal appeals court for the Ninth Circuit area.

Earlier this month, the Koch brothers’ foundation followed the Center’s lead, and filed its own lawsuit, citing the First Amendment and federal tax law as protective shields for the identity of the foundation’s donors.

There is no doubt that their organization is far more controversial than the Center for Competitive Politics, so it very likely is true that its donors have more reason to fear having their identities publicly disclosed. But, in that case as in the Center’s earlier case, a key issue is whether there would, in fact, be public disclosure of donor lists even if those had to be handed over to state officials.

Sooner rather than later, this issue seems sure to go on to the Supreme Court, forcing the Justices to sort out when privacy in political expression is too important to be sacrificed, and, alternatively, when the voting public is entitled to know the sources of the money that is seeking to influence the political choices that voters make. Balancing the two won’t be simple.